The newspaper Al-Sharq Al-Awsat reports: The sight of long car queues in front of fuel stations has returned to Lebanese roads with the announcement of impending stock shortages, coinciding with the adoption of austerity measures on wheat due to the Russian war in Ukraine and its impact on the global markets for fuel, wheat, and some food products.
After the Minister of Economy Amin Salam stated that the wheat stock is sufficient for a month and a half, the Lebanese Millers Syndicate announced yesterday that an agreement has been reached with Salam, Minister of Industry George Bouchikian, and Minister of Agriculture Abbas Al-Hajj Hassan to limit the delivery of flour mills to flour designated for the production of Arabic bread, in order to continue producing this type of flour for as long as possible until additional quantities of wheat arrive. The syndicate pointed out that the concerned ministers are making the necessary contacts with global markets which could yield positive results.
At the same time, the syndicate confirmed that there is no need for panic or rushing to bakeries and stockpiling flour and bread, assuring that wheat is available, and that close cooperation among the Ministers of Economy, Trade, Industry, and Agriculture with the syndicate is ongoing to maintain supply stability and secure food materials permanently, knowing that Lebanon imports 60% of its wheat needs from Ukraine.
In parallel, the fuel crisis has resurfaced in Lebanon for different reasons this time related to the Russian war. While stations witnessed heavy traffic and long queues of cars yesterday, others shut their hoses and closed their doors.
Fadi Abu Chakra, representative of fuel distributors, stated in a television interview that the fuel stock in Lebanon is sufficient for four to five days, noting that there had been several discussions with companies and the Minister of Energy yesterday. He pointed out that a price schedule for fuel has not yet been issued in accordance with the global rise in oil prices, confirming that fuel price increases are not local but rather global.
For his part, Maroun Shamas, president of the Syndicate of Oil Importing Companies, said that the fuel market is currently experiencing an extremely exceptional and unprecedented situation due to the ongoing war between Russia and Ukraine. In a statement, he suggested that the market may face a shortage of goods during March due to difficulties in finding alternative markets, while noting that large quantities of oil are reaching Lebanon from Russia and the Black Sea. He confirmed that importing companies have held and continue to hold successive crisis meetings with the Ministry of Energy to manage the situations and ensure market continuity and import operations to Lebanon via alternative markets. He emphasized that current import processes are limited to securing consumption needs only, given the complete lack of storage capacity for goods as current prices and global markets do not permit it.
Regarding prices, Shamas expressed that it is impossible to predict how high global fuel prices may rise or whether they will decrease or continue to rise. He noted that the importing companies do not have a strategic stock based on previous prices. He mentioned that a proposal has been submitted by the importing companies to the Ministry of Energy and Water regarding changes in selling prices in Lebanon in exceptional circumstances like those faced today, suggesting that as long as the global price change does not exceed $20 per ton, the ministry should not issue a new price schedule. However, if the rise exceeds $20 per ton based on the global market price, a new schedule would be issued and the previous pricing mechanism frozen. While he mentioned that price correction is a difficult option, he considered it an unavoidable matter to ensure the continuity of supply to the markets.
In response to accusations that importing companies benefit from rising global prices to increase profits, Shamas affirmed that there is no interest for companies in price increases for two main reasons: first, because rising prices inevitably accompany decreased consumption and sales; and second, because the Ministry of Energy and Water sets a ceiling for the net profit margin for companies, which does not change even if prices exceed $900 per ton. Currently, this ceiling stands at $1,106 for gasoline and $1,106 for diesel fuel.
